I can say with a pretty high degree of confidence that the following things are true:

1. You’re paying too much for your phone service.
2. You don’t need a traditional landline home phone.
3. The cable company “Bundle & Save” packages should be renamed “Bundle & Spend.”

Phone service is radically different than it was only a few years ago. Mobile phone plans offer a ton of minutes, multiple free calling opportunities, relatively low prices, and (this is key) a demonstrated willingness to refund the occasional month of excessive overage charges. In our area, Verizon offers 900 national minutes for $59.99 per month before any discounts (when you call to establish service with any carrier, ask if you’re eligible for any discounts - you usually are. We pay about $50 per month after discounts). Weekends are free. Nights after 9pm are free. Calls with other Verizon accounts are free. Reliability and call clarity are very good, and the packages from AT&T, Alltel, and Sprint seem to be similar. We used to spend this much on local & long distance alone, plus a cell phone as well. We were paying too much, so we ported our home phone number to Gretchen’s cell phone account since we didn’t want to lose the number we’ve had for ten years. It was a painless process, and we save money every month because of it.

We gave up our landline and went with cell phones about a year ago, and we haven’t missed our home phone yet. The only downside is we no longer have an extension upstairs so we occasionally (very rarely) miss a call because we’re upstairs and our phones are downstairs. We switched from traditional landline (Bell South, etc.) to internet phone (like Vonage). We were never satisfied. The cost was less than a traditional landline but more than switching to cell phones exclusively, and the customer service was spotty at best. Skype can be a great free alternative, though we haven’t tried it extensively.

I have to tip my cap to the marketing folks at the cable companies. They’ve convinced people that spending $120 per month on TV, internet, and phone is a great deal because they “bundle and save.” Add another $40 for a cell phone and the total cost to the consumer is $160 (split between two providers). It looks like this:

• Cable: $40
• Internet: $40
• Digital Phone: $40
• Cell Phone: $40

Instead, how about this, without losing any services:

• Cable: $45 (non-bundled price)
• Internet $45 (non-bundled price)
• Digital Phone $0 (dropped it)
• Cell Phone ($50 after doubling the plan minutes and asking for any available discounts)

That switch just saved $20 per month ($240 per year), and that’s before saving even more money on cable and internet (I’ll look at those later in the month). Bundle & Save? Nope. They should call it Bundle & Spend.

The argument many people use against switching solely to cell phones is the outrageous charges when you exceed your plan minutes. I agree. In the Verizon plan above, the 900 package minutes cost $59.99, or about six and a half cents per minute. Every additional minute costs 40 cents. We’ve gone over our plan several times in the past, with both AT&T and Verizon. Both companies have been very willing to forgive the occasional overage and remove all the charges for additional minutes. Our experience in those situations did as much as anything to move us toward going exclusively cell.

ACTION ITEM #4: If you haven’t already switched exclusively to cell phones, consider it. If you exceeded your cell phone plan minutes in the last few months, call your provider and nicely ask them to refund the overage charges since it was such an isolated set of circumstances. Apply your savings from these changes to paying off the debts you listed on day one.